This study of schizophrenia has as its main goal to advance our knowledge of the neurophysiology of schizophrenia by evaluating functional abnormalities in event-related potentials (ERPs) that span both early and late stages of processing, by integrating this information with the structural MRI anatomy, and by integrating both with the clinical features of this disorder. Recently the aim of describing the course of the disorder has become prominent, as we have moved into a prospective longitudinal study of first episode subjects. In fact one of the more exciting preliminary findings is the apparent post onset progression of schizophrenia, which is very rapid in the first 1.5 years after initial hospitalization, but much slower in chronic patients. Unifying our approach is a cellular-based model, and it, as well as our preliminary data, has led to an increasing focus on early-stage brain processing, especially auditory, as experiments in early processing appear to be especially amenable to correlation with anatomy and with documentation of progression of the disorder. We will also evaluate what is specific to schizophrenic vs. manic psychosis in ERP, MRI and longitudinal measures. We plan to examine the following measures. 1) Gamma Band (40Hz) frequency abnormalities in both steady state and evoked paradigms. 2) The auditory Mismatch Negativity (MMN, 100-200 ms), which our preliminary data suggest is normal at first hospitalization for schizophrenia and then subsequently becomes abnormal, pari passu, with grey matter volume loss in Heschl's gyrus. 3) The N170 face-related potential, which our preliminary data indicate to be abnormal in chronic schizophrenia. 4) The auditory P300. 5) The N400 to word pairs abnormalities and their MRI correlates in reduced fusiform and inferior middle temporal gyri gray matter in schizophrenia. MRI measures, including gray-white segmentation, will include all temporal lobe gyri and subdivisions, and medial temporal lobe structures. Subjects in this longitudinal study will be male and female individuals with first episode (first hospitalization) schizophrenia, affective (manic) psychosis and with chronic schizophrenia and will be evaluated for interrelationships among the physiologic, anatomic and clinical features, as well as progression of abnormalities. All groups will have appropriate matched controls. Should our prediction of very rapid progression of ERP and MRI abnormalities in the months following initial hospitalization for schizophrenia be confirmed, it would immediately form a scientific foundation and moral impetus for studies of the possible preventive effects of medication and psychosocial treatment.